Investing in Macro Trading – Investing for the Future

Arbitrage Search is a boutique search firm focusing
on recruitment for macro hedge funds.
Based in the West End of London the company
have been in business for six years to date.
The company’s director Chris Apostolou shares
his thoughts on the issues involved with
Macro Trading.

As a company we focus on a few core areas: economics, research and multi-asset. We are veterans of all recruitment styles, networking to generate references, advertising to create interest, directly contacting candidates and cold-calling businesses to uncover talent.

Our research staff focus on blue-skies analysis and researching teams at places such as the IMF or ECB in the public sector. This broad background work means we are fully prepared before major searches begin at which point the research can be tailored to each project.

Our senior consultants focus on the ‘selection’ stage, luring out top talent and ensuring the quality of shortlists to make certain candidates are fully briefed and motivated by opportunities.

In regards to our clients we are largely referred on by existing customers so the word of mouth is clearly a vital factor behind the success of our business. Run by a former economist and trader we can offer unique insight into candidates, and are unique in parting the sector by ‘macro’ skills rather than by firm type. We can attract established names who can raise capital and further provide alpha driven performance in a variety of environments.

Macro is supposed to be low correlation and offer superior returns, but there are many funds managing money that have failed to prove that. However the top tier continues to do well and inspire investors and the inevitable imitators.

Macro investors are increasingly reliant on quant signals and models, but it has been no real replacement for traditional fundamental analysis and use of expert judgement.

If we take a closer look at the industry currently underperforming firms are threatening the top end fee structure. But there is also increasing impetus on risk adjusted performance metrics which shouldn’t necessarily apply to alternative managers, in some ways these deter the narrowly focused trading strategies which enabled past out performance.

Looking ahead to the future finding consistent performing portfolio managers will be a key challenge as only the top 3rd of the sector have produced credible results.